Advertising Without Signal: The Rise of the Grifter Equilibrium
18 comments
·July 19, 2025seydor
That explains the success of platforms like Temu: every search generates many identical products that are all dirt cheap, which makes my search much easier. I find myself buying a lot faster because there is not a lot of variety and relatively little trickery/ads
esperent
Regarding the Oatly ad at the top (Another ad for our oat drink providing no reason at all why you should try it), this ad does have a signal. It's a humblebrag. It's saying, our product is so well known, and the reasons for using it so obvious, that we don't need to say anything. It's cementing Oatly brand in the minds of anyone who already thinks that they should be switching to non-dairy milk for any reason (health, environment, etc).
mattlondon
It's I think what we used to call "brand advertising".
Just like random "coca-cola" billboards at the side of a road or a sports stadium
spyckie2
I wish someone did an analysis of their marketing. I really hope it was a huge flop because it’s just awful.
I despise their horrible advertising and marketing copy in general and I sometimes just have to tell myself, “it’s just oat milk no need to boycott it because some edgy marketing consultant forces you to read their nonsense”.
mattlondon
It's in your head. Someone did something right.
xnx
Also that it is the drink of nonconformists and creatives. Many of their other ads cross way over into tryhard cringe for how "random" they are.
cnity
Tryhard cringe for us, but likely very funny and edgy to, say, 5-10 year olds. It wouldn’t surprise me if there wasn’t an attempt to center Oatly for coming generations as an investment.
neehao
agree..
maartenscholl
This has little to do with equilibrium analysis, it is just the market for lemons story but for the ad space. You need to investigate the buyers and what they believe about brand quality.
ArtTimeInvestor
CPA pricing removes the burn
Its similar to SEO. Nobody says "Oh my god, advertising via SEO is free, what a blessing!". It's still a competition. It's still a zero sum game.
soared
Those formulas have to be comedy but it seems like it’s trying to be serious.
gsf_emergency_2
Yes. Comedy is suboptimally optimal
mrala
Since the article doesn’t mention it, CPA stands for cost per action.
null
One of the remedies proposed, tying product reviews to the manufacturer instead of the storefront is a very difficult thing to implement.
Manufacturers are in a fundamental conflict with Amazon precisely because they desire to fully control the retail channels and set their own promotions, online discounts etc. and capture most of the surplus themselves while still segmenting the market and, for example, selling at different prices through certain local distributors.
Amazon has the exact opposite incentives, they want distributors of the same brand to compete amongst themselves so they can offer the lowest global prices, and that it's Amazon and its users that capture most of the surplus.
This is the root of the forgery problem Amazon can't solve, manufacturers aren't willing to vouch for their products when sold in secondary channels they do not fully control. So this means they will not collaborate on the "global rating" scheme either.